Purpose: In order to better
understand the impact of globalization on a community, students will research
and identify positive and negative effects of imported steel on the Indiana
steel industry.

Background: The United States
is the top steel producer in the world. Indiana employs over 33,000
people in the steel industry, making the state the nation’s second largest
steel producer. Internal use of the steel for a variety of industries
(automotive, shipping, buildings, rail) ranks as the number one use of
U.S./Indiana produced steel. US steel exports also exist in limited
quantities. Since January of 1998, nearly 43,000 people employed
in the US steel industry have lost their jobs: 9,600 of them in January,
2002 alone. Of the seven steel mills (Bethlehem, Ispat/Inland,
USX/US Steel, LTV, LaSalle, National, American) located in the tri-county
region of Lake/Porter/LaPorte, four have fled to bankruptcy court and several
require significant equipment overhaul costing millions of dollars.

Just as the steel industry was recovering
from economic difficulties in the 1980’s, global currencies began collapsing
in 1997, thus producing another round of economic difficulties for the
US steel industry. Thailand and other southeast Asian nations suffered
economic downturns that eroded internal demand for steel production.
Shutting down the steel mills would have further hurt their economies;
so, they began shipping low-priced steel to the United States. The
shipments sparked domestic steelmakers to complain that their foreign competitors
were “dumping” their product below the cost of production. Prices
hit an all-time low.

Job losses from the steel mills are not
the only impact on national and local communities, but many support industries
are closing due to lack of business: for example, steel mill equipment
repair, design and building trades. A host of impacts affect the
community when a company faces economic difficulties: taxes
paid by employees and businesses are not available for community, state,
and federal governments, personal spending declines, stress on the family
increases, environmental cleanup of production waste (legacy costs) is
unmet, health care benefits stop for displaced employees, and pension benefits
become unavailable to former employees. Examples exist across the
country of similar situations where cities become heavily invested in one
industry.

Some leaders in the steel industry believe
that consolidation and restructuring are necessary in order to become a
global player in the steel industry. Other leaders want to protect
their segment of the industry by limiting imports. What do you think?
(information obtained from Meltdown: Indiana’s Steel Crisis and
Indiana BMT to Administer Department of Energy Technical Program - see
Resources “a” and “c” below)

Grade Levels: 7-12

Time Required: a minimum of
two class periods should be allowed to develop this activity

Objectives: Upon completion of the
following activities, students will be able to

identify the top five international “competitors”
of U.S/Indiana steel companies and locate on a world map (Canada, Mexico,
Brazil, Japan, Korea),

explain the arguments of protectionists and
free traders as they relate to the (Indiana steel industry),

evaluate the arguments of protectionists and
free traders,

describe the short?term and long?term effects
of tariffs on consumers, firms, and the U.S. and world economies,

identify the impacts of a major industry lay-off
or closure on a community (social, economic, governmental, environmental,
other industries),

identify the needs of the workers, community
agencies, and other firms affected by the closure, and

gain a better understanding of the geographical
relationships that are in our daily lives.

National Geography Standards:1. How to use
maps and other geographic representations, tools, and technologies to acquire,
process, and report information from a spatial perspective.2. How to use mental
maps to organize information about people, places, and environments in
a spatial context.4. The physical and
human characteristics of places.11. The patterns and networks of
economic interdependence on Earth’s surface.14. How human actions modify the
physical environment.15. How physical systems affect
human systems.16. The changes that occur in the
meaning, use, distribution, and importance of resources.18. How to apply geography to interpret
the present and plan for the future.

Text that describes protectionist and free
trade arguments clearly and in detail. This text may be available
in standard economics textbooks. A particularly good discussion can
be found in The Economic Problem, 9th ed., by Robert K. Heilbroner and
James K. Galbraith (see Resources)

Copies of the articles from the Resource list
for team members

Large sheet of paper (butcher paper)

Dark markers

Access to the World Bank, US Census Bureau,
and Population Reference Bureau statistics

Procedures: Day 11. Assign students to teams of three (self-selected
or teacher-selected). Distribute one copy of Handout 1:
The Gains and Strains of Trade: The Case for Free Trade and The Case
for Protection to each student AND one copy of Handout 2: Protectionism
Versus Free Trade to each Team.2. Have students, individually, read the
text and, as teams, complete the worksheet (Handout 2).3. Each Team evaluates the arguments for
protectionists and free traders and prepares a team statement (you may
need to provide guidelines as to the team statement content) as to which
has the stronger position.4. As a class, review the arguments of
protectionists and free traders. List all of the arguments on a flip
chart for future use. Draw the students’ attention to the transitions
involved when an (American) industry closes or moves production elsewhere.
Discuss the effects that the local community would experience if a major
industry left tomorrow.

Day 25. Again, assign the students to teams
of three/four. Designate Team roles: P = protectionist, FT
= free traders, EL = environmental lobbyists, GO = local government
officials, CE = community citizens and former/current steel mill employees,
TS = transportation specialists, and MBK = representatives from Mexican,
Brazilian, and Korean steel mills. Distribute one copy of each of
the following articles (see the Resource list below) to the respective
Teams: P – Resource article a and Resource article d;
FT – a, b; EL – h; GO – a, f, g, n; CE – a, e, f, j;
TS – a, k, l, m; MBK - i. Teams will research additional materials
to support their roles.6. Teams will examine the case study of
Indiana’s steel industry. Students will read through the various
handouts identifying reasons for the Indiana steel industry difficulties
AND the effects on employees, the community, local businesses, and local/state/national
government. Each team will identify at least five arguments supporting
the roles they have adopted (that of environmentalists, Korean steel
industry representatives, local citizens, government officials, protectionist
supporters, free trade supporters, and transportations specialists).7. Encourage Teams to think beyond the
impacts mentioned in the articles and, as they search for moreideas, to consider the impacts of a major
(closure/lay-offs) in their own community. Log arguments ona piece of paper.8. If the Teams have trouble identifying
causes and effects, assist them by explaining these actual oranticipated impacts:a. Reasons or causes of the steel industry
lay-offs: competition, an aging work force withhigh seniority, wage differential.b. Effects on thousands of employees:
loss of pay, benefits, and seniority; many skilled onlyin this industry, little training for
other opportunities, little education, solutions.c. Effects on employees’ personal lives:
increased incidence of drug, alcohol, spousal, child abusedivorce increases, depression, lack of
ability to participate in social functions.d. Effects on other firms in the community:
transportation (both vehicle production and railwaytransport and shipping).e. Effects on the community: greater
demand for services provided by social services (mentalhealth and emotional support), soup kitchens,
and missions; environmental cleanup ofabandoned buildings/site; reduced
charitable contributions; reduced incidental spending.f. Effects on the government: loss
of the tax base; reduced revenues from income taxes and salestaxes; greater demand for unemployment
benefits, welfare, Medicaid, food stamps, rentsubsidies, job training, and educational
assistance.g. Possible benefits and costs to consumers:
lower vehicle purchase price; lower building coststo entice an out-of-state corporation
to build in Indiana may result in higher property taxes;students have less income/allowance due
to cut-back at own jobs or due to parental income loss.h. Environmental concerns: addressing
legacy costs and remains; decreased environmentaldegradation with eventual return to a
balanced local ecology.i. Increased awareness of global cultures.

Day 39. Each Team must present their arguments
before their peers. Attempt to work toward a classroom consensus
on the accuracy of the arguments. At the conclusion of the presentations,
a classroom vote, based upon all of the information shared, must determine
the outcome of the Indiana steel industry: protectionism versus free
trade.

Evaluation/Assessment:Students should complete all of the team
work successfully. Students should be able to explain the impact
of local firms’ exports/imports on the local economy. Students should
be able to convey a geographical perspective of the steel industry during
discussions: Indiana county’s involved, major international steel importers,
transportation, environmental impact, human impact, raw materials.

Extensions/Adaptations:1. Further study the international
steel industry by analyzing the various country’s involved in production
for environmental
impact and human impact: raw materials, infrastructure, population
statistics (poverty, literacy, birth
rate, mortality, per capita income, illness/health, climate – The World
Bank, The Census Bureau, The Population
Reference Bureau).2. Develop a series of population
pyramids of major steel producing countries. Attempt to develop a
definition of poverty utilizing
base-line statistics from a variety of agencies (as mentioned in #1 above
or The World Factbook).
Develop a series of population pyramids for the Indiana counties affected
by the steel producers economic downturns:
Lake, Porter, LaPorte. Compare the “levels of poverty” between the
three Indiana counties and
those of the poorest steel-producing nation. Equate those to the
students’ lifestyles.3. Visit a steel mill for a tour.4. Analyze the transportation mechanisms
required for steel production, delivery, import, and export.5. Further delve into the problem
of a community relying on one industry. Diversification.6. Develop an analysis tool, utilizing
GIS (Geographic Information Systems) for several U.S. one-industry towns (Ohio,
Alabama).